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Understanding Unfair Insurance Claim Reductions (Part A)

Insurance companies often find creative ways to avoid paying the money that they owe. One way medical insurers may do this is by instituting UCR rate reductions for out-of-network medical fees. In recent times, this practice has come under scrutiny. If you have been a victim of an insurer who has perpetuated this practice on many other consumers, you may be able to recover damages with a Massachusetts class action lawsuit.

What does UCR stand for?

In the insurance industry the term UCR stands for "Usual, Customary, and Reasonable" fees. Broken down, each of these terms refers to a different area of the insurer's fee structure:

• Usual fee - The amount that a specific medical professional will frequently charge for a certain medical procedure.

• Customary fee - The "customary" amount determined by a medical benefit plan administrator, as compared to the actual fees that an individual submits. This fee determines the maximum amount that is payable for a particular procedure.

• Reasonable fee - The amount charged by a medical professional for a specific procedure, which has been adjusted due to complications or extraordinary circumstances.

By reviewing these fees an insurer will determine the maximum amount of benefits they will pay. But they may find ways of reducing their payments with UCR rate reductions. If you have experienced a UCR rate reduction that has impacted your benefits, there is a good chance that other consumers have experienced the same thing with that same insurer. Keep records of all billing activities in the event that you decide to file a Massachusetts insurance class action lawsuit at any point.

How do UCR rate reductions work?

One way for insurers to make UCR rate reductions is by underestimating the costs of medical treatments. By underestimating costs, they can reduce the amount of benefits they will pay. And this in turn leaves policyholders, like you, to make up the difference when paying their medical fees.

For example, if Boston physicians charge $100 on-average for a specific medical treatment, let's assume that a typical plan will cover 80% of that cost. But an insurer may intentionally underestimate the cost for that treatment as $75, and therefore only reimburse $60 of the $100 fee. When it comes down to it, the insurer has only covered 60% of the actual medical fees.

This practice has been especially prevalent when estimating out-of-network medical fees. If you believe that your healthcare insurer has intentionally underestimated out-of-network bills in order to slam you with UCR rate reductions, it would be in your best interest to consult with an experienced Massachusetts class action attorney that specializes in insurance claim denials and reductions in Massachusetts. It is important that the lawyer has handled these types of cases and that they understand UCR rate reductions.

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